News

Mark Chalos of Leiff Cabraser Heinmann & Bernstein has been appointed federal-state-liaison counsel for the large product liability lawsuit against the New England Compounding Pharmacy. He will coordinate communication with attorneys handling cases against the company, which filed for bankruptcy late last year after it shipped to hospitals and other care providers tainted materials that led to an outbreak of fungal meningitis. The Nashville Post reports that Chalos has also been named to a seven-members plaintiff’s steering committee, joining Nashville lawyer Gerard Stranch, a member at Branstetter Stranch & Jennings. That committee, which will coordinate the pretrial discovery on behalf of the plaintiffs, also includes attorneys from Boston, Atlanta, Michigan and Virginia.

Davidson County Circuit Judge Joe P. Binkley Jr. has ordered that three pending and any similar future local cases involving the fungal meningitis outbreak to be assigned to him only. In a one-paragraph order, Binkly granted a request from lawyers for the Saint Thomas Outpatient Neurosurgical Center that all pending and future meningitis suits against their clients be assigned to a single judge. The Tennessean has the story.

William L. Hendricks, a former partner in the Memphis law firm Evans-Petree PC has been arrested on charges of theft, conspiracy to commit theft and money laundering in connection with a bogus health-insurance operation in Springfield. According to the Tennessee Attorney General’s office, Hendricks, Springfield businessman Bart S. Posey Sr. and his former business partner, Richard “Rick” Bachman Jr. of Texas, are charged with the theft of $225,000 in insurance premiums that came from some of the victims of a nationwide health-insurance scam that netted more than $20 million from about 12,000 victims. The Tennessean has the story.

The attorney of a teen hurt in a four-wheeler accident is challenging the constitutionality of Tennessee law that caps damages on tort suits, claiming it violates the right to trial by jury enshrined in the Tennessee Constitution. According to the ABA Journal, under the Civil Justice Act of 2011, noneconomic damages are capped at $750,000 and punitive damages at either twice the amount of compensatory damages or at $500,000, whichever is greater. Tennessee is only one of several states where damage cap legislation is being challenged in court. While the Missouri Supreme Court ruled the noneconomic damage limits were unconstitutional, the Kansas court upheld a cap as a way to further the public interest in ensuring affordable and available health care and reduce the cost of malpractice insurance.

A number of bills of interest to lawyers may see action before the end of the session. They include:

Lawyer Regulation -- A bill (SB 779/HB 635) to impose criminal sanctions on Board of Professional Responsibility panel members, staff, lawyers subject to discipline, and their counsel for certain procedural violations could see action in committees in both chambers. The TBA has resisted this unwelcome intrusion in the Supreme Court’s disciplinary process.

Tort -- Codification of comparative fault with limitations of joint and several liability in several types of cases that the courts have carved out by common law -- including products liability and cases with combined intentional and negligent actors -- still awaits House committee action (SB 56/HB 1099).

Collateral Source Rule --The effort to limit the effect of the collateral source rule (SB 1184/HB 978) will be studied for now but could return next year.

Workers Compensation Overhaul -- The Workers Compensation overhaul (SB 200/HB 194) continues its march towards expected passage. According to the Associated Press, the plan is scheduled for a full Senate vote on Monday night with the House Finance Committee taking it up on Tuesday.

Conservatorship -- The work of the TBA’s Special Committee on Conservatorship Practice and Procedure has been adopted by the Senate (SB 555/HB 692) and should see action in the House Civil Justice Committee this week.

Trust Law -- A bill (SB 713/HB 873) to rewrite Tennessee trust law and a 52-page amendment debuted 10 days ago will see action in the House Civil Justice Committee.

Criminal --The Senate Judiciary Committee will hear about legislation (SB 1362/HB 1293) permitting prosecution of an alleged repeat child abuser in any county where an act of of abuse allegedly occurred, and permitting evidence of all prior child abuse by declaring past offenses to be a "continuing offense.”

Insurance Company provided Trucking Company with a general liability insurance policy that included the MCS-90 endorsement required by the Motor Carrier Act of 1980. A woman who was a passenger in the insured’s tractor made a claim against Insurance Company for injuries she sustained after the tractor turned over. Insurance Company paid the woman’s claim even though she had not filed a complaint or obtained a judgment against Trucking Company/Insured. Insurance Company then filed a complaint against Trucking Company seeking reimbursement for the amount it paid out. Trial court awarded Insurance Company reimbursement. We reverse because no judgment had been obtained against Trucking Company when Insurance Company paid the woman’s claim. The MCS-90 endorsement is not triggered unless an injured member of the public recovers a final judgment against a motor carrier/insured. Therefore, Insurance Company had no right of reimbursement.

This case concerns the liability for a collision involving a vehicle operated by one of the appellees and an ambulance operated by the appellant county. After a bench trial, the trial court awarded damages to appellee driver against the appellant. After a thorough review of the record, we reverse and remand.

Frances G. Rodgers, as next friend of minors Julia Amber Noll and Joshua Aidan Noll (“Plaintiff”) sued John Adam Noll (“Defendant”) for the alleged wrongful death of their mother, Lori Bible Noll (“Deceased”). During discovery, Defendant filed multiple motions alleging discovery violations. After a hearing the Trial Court entered its order on April 25, 2012, which, among other things, imposed sanctions for certain discovery violations and then dismissed Plaintiff’s case due to discovery violations. Plaintiff appeals to this Court. We find and hold that dismissal was too severe a sanction for the discovery violations found. We reverse the dismissal; remand to the Trial Court for a more appropriate award of sanctions; and affirm the remaining specific sanctions awarded by the Trial Court and the remainder of the Trial Court’s April 25, 2012 order.

Plaintiffs sued the defendant national fraternity, among others, following an automobile accident with an apparent fraternity pledge. The trial court granted summary judgment to the national fraternity finding that it owed no duty of care to Plaintiffs, and it denied Plaintiffs’ motion to amend to allege the national fraternity’s vicarious liability based upon a principal/agent relationship between the national fraternity and the local fraternity chapter and/or between the national fraternity and local fraternity chapter members/prospective members. For the following reasons, we reverse the trial court’s grant of summary judgment to the national fraternity as well as its denial of Plaintiffs’ motion to amend, and we remand for further proceedings consistent with this opinion.

The administration’s bill to overhaul Tennessee's Workers’ Compensation system (SB 200 by Norris / HB 194 by McCormick) is set for its next major legislative consideration this week. Both the Senate and House Finance Committees are expected to take up consideration of the matter, and review, in particular, its fiscal impact. Fiscal estimates for the bill have indicated that the state expects to collect filing fees that now go to court clerks, and that those fees are expected to be sufficient to offset the cost of the new department-based system. As amended, the new legislation would be effective as to cases commenced on or after July 1, 2014. The TBA has continued to emphasize that a change to a more formulaic, purely administrative system is unwise because it does not employ our best dispute resolution mechanism -- the courts -- and does not permit enough discretion to prevent injustice.

Tennessee Attorney General Robert Cooper has filed a motion to intervene and defend state law that caps damages in civil cases, The Nashville Ledger reports. A lawsuit filed by the husband of a Brentwood woman who died after getting fungal meningitis from tainted steroid injections seeks $12.5 million in compensatory damages, well above the maximum $750,000 that plaintiffs can receive under a 2011 Tennessee law. A hearing on the state’s request was heard this morning in Davidson County Circuit Court.

This is a Tennessee Rule of Civil Procedure 25.01 case. Following plaintiff’s death and the filing of a suggestion of death in the trial court, no motion to substitute party was made within the ninety day time period set out in Rule 25.01. The trial court determined that the failure to file a motion for substitution of party was not the result of excusable neglect and granted the Rule 25.01 motion to dismiss the lawsuit. The court subsequently also granted the plaintiff’s motion for voluntary dismissal under Tennessee Rule of Civil Procedure 41.01. We conclude that, in the absence of excusable neglect, failure to comply with Rule 25.01 requires mandatory dismissal of the case with prejudice and the lawsuit may not thereafter be revived by the filing of a motion for voluntary dismissal. Reversed and remanded.

John W. Chandler, Jr., Chattanooga, TN, for the appellee, James Eric Hamm.

Judge: HIGHERS

This appeal involves a dispute over an attorney’s fee involving two law firms and their client. The parties originally entered into a contract whereby both law firms would jointly represent the client as a plaintiff in a personal injury suit. Two years later, the client discharged one of the law firms. The other firm continued to represent the client, and when the case settled over a year later, the remaining firm retained the entire contingency fee. The discharged firm sued the client and the other firm, alleging that it was entitled to a share of the contingency fee and asserting numerous causes of action. The defendants claimed that the discharged firm was limited to quantum meruit. The trial court granted summary judgment to the defendants on all claims. The plaintiff law firm appeals. We affirm.

Gov. Bill Haslam's plan to overhaul the state workers' comp system is moving forward after a House subcommittee approved the measure. With that action, the bill heads to the full House Consumer and Human Resources Committee, where it is scheduled to be considered on March 12, according to the Nashville Business Journal. The subcommittee meeting took an interesting turn when the chair of the full committee was heard on a live microphone saying he planned to ram the bill through. The Nashville Scene has those remarks.

This is a surveyor negligence case. Appellee developer filed suit against Appellant surveyor, claiming two distinct acts of negligence on surveyor’s part. The first claim of negligence involved an error allegedly made by surveyor in a 1993 survey. The second claim of negligence involved Appellee’s claim that, upon discovering the 1993 survey error in a subsequent survey that it performed in 2002, surveyor had a duty to inform Appellee of the error. We conclude that any negligence arising from the 1993 survey claim is barred by the statute of repose, Tennessee Code Annotated Section 28-3-114(a). Despite Appellant’s numerous motions to exclude this cause of action as time barred, the trial court ultimately allowed the 1993 negligent survey claim to be tried to the jury. The jury was then instructed as to both claims of negligence and the jury returned a verdict, wherein it found Appellant surveyor to be forty percent at fault and awarded damages in favor of Appellee. Appellant surveyor appeals. Because the jury was improperly instructed and was allowed to consider the time-barred claim of negligence, we conclude that the jury was mislead by the instructions. Accordingly, we vacate the judgment on the jury verdict and remand for a new trial. Vacated and remanded.

A woman who was severely injured in a collision with an automobile driven by an unlicensed minor filed suit against the minor. The minor’s parents’ insurance company denied coverage and refused to defend the suit on the basis of an exclusion in the insurance policy for damages caused by a party driving without permission of the owner or a person “in lawful possession” of the vehicle. No defense was offered, and the injured party obtained a $1 million default judgment against the minor driver. The injured party and the minor’s parents then jointly filed suit against the insurance company, alleging that the insurance company was liable for breach of contract, bad faith, violation of the Tennessee Consumer Protection Act, and violation of the Unfair Claims Practices Act based upon its denial of coverage. The trial court ruled that, as a matter of law, the minor was entitled to insurance coverage under her parents’ policy at the time of the accident. The remainder of the case was tried, and the plaintiffs were awarded compensatory and punitive damages on the bad faith claim. The jury also found the insurance company had violated the Tennessee Consumer Protection Act, and the trial court trebled the compensatory damages and awarded attorney fees under the Act. The insurance company has raised a number of issues in this appeal, inter alia, the grant of partial summary judgment to the plaintiffs on the question of coverage; the finding of liability for bad faith, the liability and enhanced penalty under the TCPA, and the requirement that plaintiffs should make an election between the punitive damages and the enhanced damages. We affirm the breach of contract holding, including the conclusion that the policy terms provided coverage. We reverse and vacate the holding of liability for bad faith, including the award of punitive damages thereunder, since the statutory cause of action was not plead. We also reverse the award of treble damages under the TCPA, but affirm the finding of a violation of the Act. We affirm as modified the award of attorneys’ fees.

Lawyers for Saint Thomas Outpatient Neurosurgery Center are blaming officials with the U.S. Food and Drug Administration (FDA) and state officials for last year's fatal outbreak of fungal meningitis, The Tennessean reports. The center says the FDA failed to make findings available that showed the New England Compounding Center -- which supplied the tainted injections -- was out of compliance with regulations. It also argues that the Tennessee Health Department was responsible for any delays in notifying patients of the outbreak.

This is a negligence case in which Passenger sued ETHRA and Driver for injuries she sustained when exiting an ETHRA public transit vehicle. The trial court dismissed the claim against Driver but denied ETHRA’s motion for summary judgment. Following a bench trial, the court dismissed the claim against ETHRA, holding that Passenger failed to prove that Driver was negligent. Passenger appeals. We affirm the decision of the trial court.

Appellant appeals the trial court’s grant of summary judgment to the Appellee uninsured motorist carrier for failure to properly and timely serve the alleged tortfeasor. After a careful review of the record, we affirm.

U.S. District Judge Todd Campbell dismissed three lawsuits that accused federal agencies of negligence during the 2010 Nashville flood, ruling that the government has legal immunity under a 1928 federal flood control law. The Tennessean reports that Gaylord Entertainment Co. (now Ryman Hospitality Properties), Gibson Guitar, Nissan North America and several other companies sued the U.S. Army Corps of Engineers and the National Weather Service last year for acting negligently and inadequately communicating with each other before and during the storm. The government sought to have the suits dismissed, asserting that federal agencies are legally protected when they make discretionary decisions based on public policy considerations.

The issue presented is whether the jury verdict against the management company of an assisted living facility for negligence based on understaffing is supported by material evidence. Mable Farrar’s physician prescribed Ms. Farrar a daily dose of an over-the-counter medicine for constipation. The nursing staff at the assisted living facility where Ms. Farrar lived did not give the medicine to her as often as prescribed. As a result, Ms. Farrar became constipated and returned to see her doctor. Ms. Farrar’s doctor notified the nursing staff at the assisted living facility to give Ms. Farrar three to four enemas each day beginning on May 27, 2004. A facility nurse gave Ms. Farrar one enema on the evening of May 27, none on May 28, and one enema on the evening of May 29. Very soon after receiving the last enema on May 29, Ms. Farrar died from a perforated colon. Her daughters filed a wrongful death action against the nurse who gave the enema, the director of nursing at the assisted living facility, the owner of the facility, and its management company. The suit alleged that the negligence of the staff, the owner, and its management company caused Ms. Farrar’s death. The jury returned a verdict finding the nurse thirty percent at fault, the director of nursing twenty percent at fault, and the management company fifty percent at fault based on its failure to provide sufficient personnel at the facility. The management company appealed. The Court of Appeals reversed the jury verdict against the management company, finding that there was no material evidence that staffing deficiencies proximately caused Ms. Farrar’s death. We hold that the jury’s verdict was supported by material evidence. Accordingly, we reverse the decision of the Court of Appeals and remand the case to the Court of Appeals for review of the award of punitive damages.

This interlocutory appeal involves the question of whether the arbitration provisions contained in Tenn. Code Ann. §56-7-1206(f)-(k)(2008), a part of the Tennessee uninsured motorist (“UM”) statutory scheme, apply to policies with UM coverage that were issued and delivered in Texas. The trial court held that the arbitration provisions do apply. The UM carriers, brought into this action pursuant to the provisions of Tenn. Code Ann. §56-7- 1206(a), appealed that decision. We reverse the trial court’s judgment.

The Tennessee Supreme Court reinstated a jury verdict against the management company of a Shelbyville assisted living center in the death of an 83-year-old resident. Records indicate the woman died from a ruptured colon after a nurse improperly administered an enema. The Supreme Court reinstated $300,000 in compensatory damages after finding that the center was understaffed and that the management company knew about it but did not fix it. A $5 million punitive damages award approved by the jury was sent back to the lower court for review.

The Haslam Administration's proposal for workers’ compensation overhaul may see its first legislative test next week when it comes before the Workers' Compensation Advisory Council on Thursday at 1 p.m. The council is set up to review and comment on bills but it cannot stop legislation. A TBA Workers’ Comp Working Group has been closely following the developments and is presently reviewing the latest draft of the legislation. The long-standing policy of the TBA is to oppose moving workers’ comp claims from the courts to a purely administrative process. The TBA hopes to continue playing a constructive role in whatever legislation emerges. The administration’s amendment would replace SB 200/HB 194. TBA members have voiced their views to many lawmakers. Among those commenting was LaFollette lawyer David H. Dunaway, who wrote this letter to the editor of the Tennessee Bar Journal.